(15-02-2011, 10:52 AM)freedom Wrote: [ -> ]is money market fund cash equivalent?
maybe the investment is some corporate bonds or equity stake.
Not exactly cash equivalents or else it would have been classified as such. It is a trading instrument which means it probably has a value which fluctuates according to market movements, but is liquid enough such that the Company considers it a Fund for M&A in case the cash is needed.
For this aspect, I will leave the Company to manage its cash. I am sufficiently confident of FF Wong, being a shareholder for 4.5 years and attending every AGM, to feel comfortable in letting him manage and deploy Boustead's cash hoard and reserves.
I believe YZJ is even more adventurous. A substantial portion of its cash goes towards high yielding bonds and notes. Its quarterly interest income exceeds S$25 million.
In Boustead case, could that refer to its investment in Biotreat ?
(15-02-2011, 12:45 PM)Nick Wrote: [ -> ]In Boustead case, could that refer to its investment in Biotreat ?
No, look at the Balance Sheet closely. The investment in Bio-Treat is parked under Long-Term Assets as AFS Investments, to the tune of about $4M. Page 19 of the financial statements explains the $26.9M as such:-
"Held for trading and available-for-sale investments increased significantly to $35.1 million in total due to investments made under a new cash management programme that had been set up to optimise excess cash management while the Group searches, evaluates and concludes major acquisition or long-term investment opportunities."
The previous number used to be just $5.55M as at March 31, 2010.
While YZJ is probably making the best use of its cash, I believe Boustead would be more ambitious and seek high ROE investments instead of just parking their cash in MMF or such trading investments for the medium-term. FF Wong alludes to this in the Press Release as well.
IMHO, when a company deviate from their competency (what they probably can do best).
it is always a red flag.
Wondering how they do the risk assessment? hiring financial adviser?
Maybe this is a bit OOT, park under YZJ thread instead?
(15-02-2011, 01:10 PM)valuestalker Wrote: [ -> ]IMHO, when a company deviate from their competency (what they probably can do best).
it is always a red flag.
Hmm, are you referring to Boustead or YZJ? Personally, I think that such Funds are low risk and are simply an avenue to park cash until it is ready to be deployed. In the meantime, the yield is higher than putting the money in FD.
Perhaps you may have a different view of risk and competency, but to me this seems the normal course of business for any company.
(15-02-2011, 02:14 PM)Musicwhiz Wrote: [ -> ] (15-02-2011, 01:10 PM)valuestalker Wrote: [ -> ]IMHO, when a company deviate from their competency (what they probably can do best).
it is always a red flag.
Hmm, are you referring to Boustead or YZJ? Personally, I think that such Funds are low risk and are simply an avenue to park cash until it is ready to be deployed. In the meantime, the yield is higher than putting the money in FD.
Perhaps you may have a different view of risk and competency, but to me this seems the normal course of business for any company.
I was referring to YZJ.
IMO, save for S&L and Banks, companies shouldn't try to outsmart themselves by investing in high yield bond (esp junk bond)
Of course i agree with you, for Boustead case, i am quite confident in the way they deploy and manage their cash.
See the war chest and you get the feel on how tight the old man holding his cash.
I understand that Kim Eng is organizing a Meet the CEO session with Boustead's FF Wong on February 25, 2011 from 1-2 p.m.
Is anyone going for this session? If so, perhaps they can share some insights as to how FF Wong will deploy Boustead's huge war chest.....
For myself, I am unable to make it, and anyway by the time I realized it, it was stated "FULLY BOOKED".
yes, anyone going? please share.
By the time i saw it, it was FULLY BOOKED as well.
Well is it still possible to go anyway? But its kinda difficult for my current schedule now...
(03-01-2011, 10:35 PM)mrEngineer Wrote: [ -> ]Yeokiwi explanation makes abit more sense. More short term profits to fund long term projects.
Still, I think there must be a higher or complicated reason for this phenomenen. 
Just to share, there are some countries like Russia and Kazakhstan budgets are largely dependent on the oil & gas. If oil price is high, their budgets are refilled with tax incomes that could fund many infrastructure projects. This including more projects to extract and process oil & gas as well, killing the golden goose earlier.